Dive Brief:
- Amazon plans to cut 16,000 more jobs as it pursues reorganization, the company said Wednesday in a blog post. The company, which will report Q4 2025 and full fiscal year earnings next week, declined to disclose which departments were affected in an email to CIO Dive.
- The latest reductions mark a second wave of layoffs for the retail giant and tech provider, which cut 14,000 positions in October citing a need for a cultural reset amid the influx of AI. The company did not rule out further cuts ahead amid the structure change.
- “Some of you might ask if this is the beginning of a new rhythm — where we announce broad reductions every few months,” said Beth Galetti, SVP of people experience and technology at Amazon, in a blog post. “That’s not our plan. But just as we always have, every team will continue to evaluate the ownership, speed, and capacity to invent for customers, and make adjustments as appropriate.”
Dive Insight:
Amazon has been pursuing a cultural shift since 2024, after CEO Andy Jassy declared the need for a flatter organization and faster decision-making. The effort has led to 30,000 job cuts, or close to 10% of Amazon’s roughly 350,000 corporate workers.
“We are committed to operating like the world’s largest startup, and that means removing layers,” said Jassy, during the company’s Q3 2025 earnings call in October. “It means increasing the amount of ownership that people have, and it means inventing and moving quickly.”
Amid the structural changes, Amazon aggressively pursued an investment strategy meant to capitalize on surging demand for cloud and AI services. Last year, the company pumped more than $100 billion into capital investments, primarily to expand compute capacity in its profitable AWS unit.
The impetus behind the headcount trim isn’t related to AI replacing employees, according to J. P. Gownder, VP and principal analyst at Forrester. Instead, the decision is a financial one, Gownder said, pointing to Amazon’s Tuesday announcement that it plans to shutter all Fresh and Go grocery stores. Both moves open up more capital to accelerate investments in AI infrastructure.
“Technology vendors are making a big, era-defining bet on AI and cloud services,” Gownder told CIO Dive in an email. “Amazon is betting that it needs to invest more to stay competitive against Microsoft, Google, and other rivals.”
For Scott Bickley, advisory fellow at Info-Tech Research Group, COVID-19 pandemic-era overhiring continues to play a role in the recent staffing changes at Amazon.
“People truly don’t have an appreciation for how big and bloated a company like Amazon got after COVID,” Bickley said. The rapid boost in headcount led to an increase in bureaucracy and added layers to decision-making, which Jassy called out in his Sept. 2024 note to employees.
“When you look at the size of their organization, I look at this as trimming and right-sizing,” said Bickley. “I don’t look at this as any material change in strategic path or direction for the company. I think they are just trying to get back to a faster operating cadence.”
